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Cloud Arms Race Continues as Amazon Opens Argentina Office

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Nov. 20 2020, Updated 5:29 p.m. ET

Amazon attracted by revenue opportunities, talent in Argentina

Amazon (AMZN) is expanding its cloud footprint in Latin America as it pursues growth overseas. Amazon’s cloud-computing unit, Amazon Web Services (or AWS), quietly opened an office in Argentina’s capital, Buenos Aires, in April, according to a Reuters report. The Argentina office joined the likes of AWS’s offices in Mexico, Brazil, Chile, and Colombia.

According to Amazon, the Latin American market presents a wealth of opportunity and talent. The AWS team in Argentina is promoting the use and innovation of cloud technologies. AWS has also discussed setting up a data center in Argentina to support its cloud operations in Latin America. The company currently has its Latin American cloud region in Brazil.

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Cloud revenue rose 49%

Amazon’s cloud revenue rose 49% YoY (year-over-year) to $5.4 billion in the first quarter. At Microsoft (MSFT), core cloud revenue jumped 93% YoY. Cloud revenue rose 20% YoY at IBM (IBM) in the quarter. Although Google (GOOGL) doesn’t break out its cloud sales, the segment under which its cloud sales are booked recorded a 37.5% YoY rise in revenue in the quarter.

Amazon under pressure to defend market

Amazon is expanding its cloud operations in Latin America at a time when it’s under pressure to defend its market share as some of its customers adopt a multicloud strategy, taking some of their cloud workloads to rival platforms. For example, Spotify (SPOT) and Twitter no longer rely on Amazon as their sole cloud provider.

As Amazon works to deepen its penetration of the Latin American cloud market, Google is investing in undersea cable systems as it seeks to expand and strengthen its cloud operations.

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